How do instant payday loans work?

If you’ve ever taken out a standard loan before, then you may already know that this can be a long and drawn out process. You may have to wait weeks to find out if a lender is willing to let you borrow and it may take years to pay back what you owe. Instant payday loans, however, are designed to be very different.

This isn’t a criticism of regular loans. They are just designed to work differently. Payday loans are based on an alternative cash advance system and may well work on completely opposite principles to other loans. For example, they may:

1) give you a loan for a small amount of money;
2) allow you to get the money you need virtually instantly;
3) not put you through the hoops of a drawn out credit checking and approval process;
4) be paid off in a few weeks (or even days) with a set amount of interest added when you next get paid.

Let’s be honest now. You may have heard that payday loans come with high interest rates. This may not be that surprising given the advantages they may give you. They may sometimes cost more but you generally may not suffer if you manage your loan correctly. Paying back what you borrow when it becomes due just sees you pay a fixed sum on top of your loan amount.

Not paying back as you are meant to, however, may be when this kind of solution costs more. But, if you use high risk loan in the right way this may never be an issue. For many, the benefits of this kind of short-term cash advance far outweigh any disadvantages.

You may not have to go through a long credit approval process for this kind of loan but you may need to tick some boxes before you are able to apply. The criteria set by a payday loans company may vary but, typically, you may need to:

-work full-time;
-earn over a minimum amount every month;
-hold a US based bank account that comes with a debit card.

Instant payday loans may well be a quick and easy lending solution for those that may only need a small loan for a short period. These loans may be an alternative worth considering if you ever find yourself in this situation.

What are the benefits of a payday cash loan?

Payday cash loans are often used to meet specific lending situations. You may yourself find them useful at some point in certain circumstances. The fact is that your borrowing needs aren’t always necessarily the same. Sometimes, for example, you may need to:

– borrow a large sum of money for a number of years to do something specific;
– borrow a smaller sum of money to tide you over for a few weeks until you next get paid.

In the first instance a secured or unsecured loan may be an option. These products are designed to help consumers deal with relatively large borrowing needs. They may, therefore, be set up not to be paid back in full for years at a time.

But, some of us also find that we sometimes have shorter term and smaller borrowing requirements. Sometimes something comes up or we need some cash fast to pay for something that is important to us. But, we may not have a spare couple of hundred pounds to use until we next get paid.

This is where a payday cash loan may be useful. This kind of loan may be typically set up:

– within a few hours;
– to give you access to a small loan (i.e. $100 or $200+);
– to give you a loan until you next get paid at which point you pay back what you borrowed, plus a pre-agreed amount of interest;
– to leave you free from your debt again after your next payday (as long as you pay back what you borrow).

The benefits of this kind of lending may be that they allow you to organise a small cash advance with no fuss for a short time. The other alternatives in the lending sector may make you wait weeks for approval (with no guarantee that you’ll get it) and may expect you to borrow more than you may actually need to.

A payday cash loan may not, however, be designed to last for as long or to involve so much hassle. If you pay it back when your next payday comes along then your only cost is the agreed interest charged. Within a few weeks you may be debt free once again.

What are payday loans?

If you’re looking for a short term loans solution, perhaps even just for a minor amount of money, then you may find it worth your while to look at payday loans. Like any other lending product a payday loan involves borrowing money from a company and paying it back with interest.

But, these loans work a little differently to other lending products. These loans are designed to be:

– arranged and approved at short notice;
– used when you only need to borrow smaller sums;
– used to borrow for shorter periods of time.

These loans are typically used for stop-gap, short-term financing. A standard loan, such as a secured home loan or an unsecured loan, may take weeks to arrange and may come with a higher loan limit than you may need. These types of loans tend to be designed to allow people to borrow more money over years.
Payday loans, however, work more on a cash advance principle. You may, for example, need to borrow a couple of hundred pounds to tide you over until you next get paid. Money may be short, you may have an unexpected bill to pay or you may need fast access to cash immediately.

These loans get their name because they give you a cash advance until you next get paid. Used correctly, they are meant to give you virtually immediate access to a small loan for a few days or weeks. Generally, when you take out a payday loan, your pay-back time is set for your next payday.

So, if you take out this kind of finance you may typically find that:

– you are able to borrow a small amount with just a quick credit check;
– your loan may be processed and paid to you extremely quickly (i.e. often within 2 hours);
– you pay the loan back when you next get paid so you don’t have a long-term debt hanging over your head.

It may be important to think about how these loans are meant to work before you apply for one. This may be a great way of getting a quick and easy cash injection when you need it. But, if you don’t pay it back when you are supposed to, then the interest charges may be an issue.

Because of the way that payday loans work, their charges may be a lot higher than standard lending charges. However, if they are used correctly then this may not be an issue to you. Paying back what you borrow on time and not rolling your debt over or continuing to borrow may make this a viable lending solution for you.

Learn more here – “Payday Loans and Cash Advances”